“Too small to survive?”

Speciality Bites with

Paul Hargreaves

Chief executive of Cotswold Fayre

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• Top trend predictions for Christmas 2021
• Self-sacrifice: The importance of building a leadership legacy centred on others
• Undercover Boss
• Can/should bosses really be close friends with their staff?

I am always more interested in Dragon’s Den when companies come on from the speciality food world. I think this series, so far, there have been three – and in any event there always seems to be at least one food and drink company on the programme. What is especially interesting, of course, is to find out the financials of these suppliers, or in some cases, ex-suppliers. These are the kind of questions it is not polite to ask during supplier meetings, and most suppliers are too small to have to post full audited accounts, so illuminating to see what is really going on

My thoughts here don’t just apply to food companies, and I am often shocked by the low turnovers of many companies on Dragon’s Den, who often value their businesses at ridiculously high levels, only to be mocked by the dragons.  Why do they keep doing it? Being astonished at just how low these revenues are, I end up thinking that if even an average salesperson had those samples and went out selling for a month, they would generate more sales than some of these people have managed to accumulate in 2-3 years. This brings me back to the speciality food sector, and I often wonder how many suppliers to the farm shops and food halls of the UK are generating enough revenue to pay themselves much more than the Living Wage of £8.25 per hour (outside London). 

This proliferation of tiny companies within the sector certainly adds variety but is it really good for us? A couple of customers have said to my sales team recently that they are changing direction and are going to stock their shops with products that are exclusive to them within a 50 mile radius. Is this really the right way to go? Do we really need loads and loads of tiny brands in the market that are unable to resource any marketing spend and don’t have finance to invest in NPD or new packaging more than once every 5 years? Yes, we need to encourage new start-ups in the sector, and at Cotswold Fayre we do more than our fair share of this, but these companies should be ones that have ambition to grow and able to tell the world (or at least the country) how good their products are, and develop into medium-sized companies. It is possible to do all this and grow brand awareness without supplying the supermarkets. But is it in the interest of the sector to have a proliferation of small brands supplying a maximum of 30 -40 shops each?

Personally, I rather think not, but I am more than happy to have you disagree with me. Let me know what you think @paul_hargreaves. Apart from anything else, just having loads of tiny brands in-store means that a huge amount a tasting will need to be done, which is draining on resources. Yes, there should always be theatre and tasting in-store, but it is important to stock brands that sell without huge effort too. Balance is everything!